Properly financing your retirement should be your first priority, but what if you also want to contribute to your grandchildren’s education? We asked Larry Mathis, CEO of Mathis Wealth Management in Phoenix, Ariz., to explain how to do both.
larry light: Is it true that one of the best things you can do for your children and grandchildren is to make sure they don’t have to support you in your old age?
Larry Mathis: It may sound a bit selfish at first, but when you think of all the stress and strain that is placed on a family by caring for elderly parents who have no resources of their own, it really is one of the most selfless things you can do. make.
Light: That said, are there any actions you can take now that can go a long way toward making sure the next generation also gets the education they need to succeed, while still contributing to your retirement fund?
Mathis: Yes, there are some ideas to help pay for your grandchildren’s college and other educational needs without sacrificing your own chance at a secure and fulfilling retirement. First, it can help fund a 529 Plan. Section 529 of the Internal Revenue Code governs “qualified tuition plans.” Parents or grandparents can deposit funds for future education costs, and the funds grow tax-free.